Citing recent findings that businesses owned by white women and people of color are massively underrepresented in city government contracts, Acting Mayor Kim Janey on Wednesday announced the creation of a team to help diversify the ranks of Boston’s suppliers and vendors.
“Business owners of color are too often overlooked and underrepresented,” Janey said at a news conference at Malcolm X Park in Roxbury.
The “supplier diversity team” includes five full-time staff positions and will lead the city’s efforts to develop inclusive procurement practices, monitor city contracts, provide technical assistance to businesses, offer business certification, and connect businesses owned by women and people of color to current and future contracting opportunities, city officials said.
The city has also hired its first director of strategic procurement to support a fair process across city departments, Janey said.
Companies owned by people of color landed just 2.5 percent of the $2.1 billion in contracts for construction and professional goods and services that the city awarded during Martin J. Walsh’s first term as mayor, according to a city-commissioned report. Fewer than half of the city’s residents are white, according to US census data.
The study, aimed at uncovering racial and gender disparities in city spending, analyzed nearly 48,000 contracts from 2014 to 2019. It showed the city spent $185 million, or 8.5 percent of its contract and procurement dollars, on businesses owned by white women.
Black-owned businesses received just 0.4 percent of total spending, while Latino-owned businesses garnered 0.8 percent. Those owned by Asian-Americans received 1.1 percent. The vast majority of spending went to businesses owned by white men.
“These troubling disparities are the result of discriminatory policies that we have all inherited,” Janey said.
Janey also unveiled a new $750,000 fund that will help Boston businesses owned by women, people of color, and veterans that wish to compete for contracts. The fund “will award grants of up to $15,000″ for technical assistance.
Janey said the city will begin the effort to diversify the contract process with a project to improve Malcolm X Park in Roxbury.
The city is increasing the project’s budget to $9.4 million from $5.9 million. Through a pilot program, the city will seek to “give a diverse array of businesses the opportunity to partake in the comprehensive renovations to come, such as upgrading the basketball courts, tennis courts, playgrounds and turf field,” among other improvements, officials said.
In response to the contracting study, Walsh, weeks before he left City Hall to become the nation’s labor secretary, announced new procurement goals for businesses owned by people of color and women. His order set a goal for the city to hire such businesses for at least a quarter of its contracting.
Other goals outlined in the order included awarding at least 15 percent of city contracts to women-owned businesses and at least 10 percent to businesses owned by people of color.
How the city awards contracts by is emerging as a major campaign issue in the mayoral race. Janey’s announcement came a day after she confirmed she is seeking a full term.
Michelle Wu, who is among several city councilors running for mayor, said in a statement that the city needs “to think bigger and do more” when it comes to contracting.
“Keeping the same goals set by the last administration of just 10 percent of city contracts to minority-owned businesses and 15 percent to women-owned businesses simply isn’t enough,” Wu said. “Boston should set the standard for all cities.”
Councilor Annissa Essaibi George, another mayoral candidate, has advocated for a home rule petition to allow the city “to unbundle these large contracts to ensure minority and female-owned businesses can fairly compete.” Home rule petitions that win local approval also need passage in the Legislature to take effect.
Essaibi George said Wednesday said such a change is necessary to realize structural changes.
City Councilor Andrea Campbell, who is also running for mayor, has pledged to streamline the procurement process and help small businesses navigate it. She said the steps the city announced Wednesday “are exciting and important and must be sustained through our city budget in the years to come.” She has previously denounced the contract disparities as “an absolute failure” of Walsh’s administration.
Said Campbell, “To close the profound racial wealth gap and eradicate inequities that make Boston one of the most unequal cities in the country, the City of Boston must lead by example in how we do business, and that means creatively and courageously implementing strategies to achieve equity in City contracts. The steps the City announced today, particularly in new staff capacity focused on supplier diversity and providing WMBE companies access to capital, are exciting and important and must be sustained through our City budget in the years to come.”
However, mayoral candidate John Barros, who was Walsh’s economic development chief, has pushed back at critics who say the Walsh administration did not do enough to address the disparities. City officials “created a well-documented framework that gave the city the legal grounding to set race- and gender- conscious goals in city contracting,” he said in a statement.
“As a part of our work to create a more just economy in Boston over the last seven years, we focused on the city’s own spending power as a key lever for increasing equity in business opportunities,” he said.
Another mayoral candidate, state Representative Jon Santiago, said he was grateful for Walsh’s action to address the problem and to Janey for implementing solutions.
“But, we also need to recognize this has been the result of years of inequity and, in turn, will take more than months to fix,” Santiago said. “Through these government contracts, we can reorient the way the city does business so it’s equitable to all and the playing field is leveled.”
Meghan E. Irons of the Globe staff contributed to this report.
A previous version of this story included a quote with unclear attribution. The quote is now attributed to City Councilor Andrea Campbell.